Persistent inflation in both the United States and the European Union, coupled with a sluggish real estate market, continues to weigh heavily on Vietnam’s wood export industry—particularly indoor furniture exports—to these two key markets.
Sharp Decline in Exports to the U.S. and EU
According to data from the General Department of Vietnam Customs, in the first quarter of 2023, the export value of wooden products reached an estimated USD 1.87 billion, down 38.5% year-on-year.
Wooden furniture accounted for 56.5% of total wood and wood product exports, dropping 11.5 percentage pointscompared to the same period last year.
The United States remained the largest importer of bedroom furniture, representing 76.6% of total export turnover for this segment. However, due to high inflation, exports of this product group to the U.S. fell 51.1% year-on-year.
In the EU market, the export value of wood and wood products in the first three months of 2023 was only USD 133.2 million, a 37.1% decline compared to the same period in 2022.
At the recent seminar “Trends and Potential of Vietnam’s Wood Exports to the EU–U.S. Markets” organized by the Investment and Trade Promotion Center of Ho Chi Minh City (ITPC), experts emphasized that high inflation in major export markets is significantly curbing consumer spending, especially for non-essential items.
While efforts are underway to contain inflation, no short-term relief is expected. In 2023, the EU economy is forecast to grow by just 0.5%, down from 2% in 2022, with inflation remaining around 7%. This continues to suppress consumption and make it difficult for exporting nations to maintain sales into the EU.
Furthermore, both the U.S. and EU real estate markets—which strongly influence demand for home, office, and living room furniture—remain stagnant. Until there are signs of recovery in this sector, furniture export turnover is expected to stay weak in the short term.
EVFTA Offers Long-Term Potential
According to Nguyen Tuan, Deputy Director of ITPC Ho Chi Minh City, the EU accounts for 25% of global furniture consumption and has an average annual growth rate of 4.5%. However, Vietnam’s share in the EU’s total imported indoor furniture volume remains modest—only 1.9% in 2022.
This shows that, despite current challenges, Vietnamese wood exporters still have substantial room to grow in the long term. The EU–Vietnam Free Trade Agreement (EVFTA) provides a clear advantage, progressively reducing tariffs to 0%, enhancing competitiveness, and attracting more EU investment into Vietnam’s wood sector.
Now in its third year of implementation, the EVFTA is regarded as a key driver for boosting Vietnam’s export potential to the EU. Among Asian nations, Vietnam is one of only four countries with a trade pact with the EU—allowing it to benefit from preferential access amid the EU’s push to diversify trade partnerships and support domestic market recovery.
These conditions are expected to create new opportunities for Vietnam to expand exports to the EU over the medium and long term.